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If you could pick any historical event to relive, it probably wouldn't be the maiden voyage of the Titanic — that didn't go well. And now, 100 years later, federal, military and Social Security retirees are just becoming aware of a political iceberg that could punch a hole in their future benefits, Senior Correspondent Mike Causey says.

The current COLA formula doesn't reflect true inflation because of the items it excludes from the computation.The chained COLA formula is even worse.Another exercise by the DC geniuses to reduce FED pensions and SSA annual increases.How about if congress uses the chained cola formula to determine their annual salary increases and increses in their office/travel budgets.

No colas for 3 years is no fun. Especially with real inflation over 10%. (check food, fuel, energy, etc.). Lower housing prices do nothing except put me deeper into negative equity. Like being sent to Iraq, we all have a plan for survival, and hope our's is right.

Actually this proposal bothers me less than most as at least all retires take the hit. Which isn't really a hit as most wound't know what they would have gotten anyway, except some Federal Employees. Something has to be done with social Security as that is one of the biggest pieces of the budget and growing. At least the Federal Employees are not the only one, in this proposal, paying for the deficit.

is completely paid for..it does not cost the taxpayer one cent and does not contribute one penny to the deficiet. There are amply funds in the system to cover its costs for nearly 25yrs....it should not even be in the dicussion regarding the national debt or the annual budget deficiets...it doesnt impact either. But the fact is Congress has stolen billions and billions of dollars from the SS Trust Fund in an attempt to cover up the hugh budget deficiets it was running and paid those monies back with IOUs..and that is what is causing the problem. Those IOUs are coming due. IMO its time for Congress to do what any borrower would do, its time to pay the piper. You took the money without consulting the people you were taking it from now its time to pay it back. And you cant do it by simply borrowing more money from the Fund..your credit aint any good in here anymore Congress. The fact is, Congress stole that money and now they cant pay it back. So instead of being held responsible for their actions, they simply want the lender to pay back the money they stole..thats their fair and balanced proposal. Thats their idea of shared pain..how about this, lets rob all their investment portfolios, lets trim their healthcare and retirement benefits,lets cut their salary and lets tax their income at a highter rate to start with and lets call that shared pain.

Social Security is based on a time when we lived shorter lifespans. Adjustments must be made to keep up with reality. Early retirement adjusted from 62 to 64, over time. And 67 to 68 for full retirement. Can't cheat the actuaries.

Just raise the cap on the tax. This year it was at about $110,000. So, raise it to $250,000 or just remove it completely and tax everyone. Then apply a needs test so that those making a million annually do not get SS checks upon retirement. Taxing everyone might make it possible to reduce the SS tax on everyone, to boot.

There is an argument for raising the cap on SS. A one time raise of $25,000; then continue to raise it by the present inflation factor. Taxing all levels of income just gives the politicians more money to run thru. And, less money in the private economy for profitable investment. Means testing is an option. Although, paying back the original amount paid in (employee share, only), over time would be fair.

I am not sure whether raising the cap beyond inflation is the correct answer or not. Social security benefits are based on the income you are taxed on. The first level of benefits on about $8000-10000(I think) gets a benefit of 90% of that income.(exclude certain people who did not pay into siocial security for 30 years---Thanks Reagan) The second level is 32% of somewhere around $35000 (estimate) The third level is 15% of the remainder. The amount you were taxed on is the highest averaged 35 years of income with some adjustments that I do not know. If you do not have 35 years you have zeros in the missing years. My question is whether the social security payouts at 15% would exceed or be less than the payins for the high income taxpayers. Need a statistician for that one. (cont)

Ben, you brought up a good point, but I believe that 67 or 68 is already in existence for a certain age group. I would raise it to 70. (Disclosure-I am not eligible for social security presently, although I expect to be eligible by the time I am about 70.) I also believe that the rates must go up. I read, but I do not know where or when, that if we raise the rate by 1% social security should be okay for 75 years.----Linbob, I disagree with you about not allowing millionaires to collect social security. If they pay into it, they should be allowed to collect from it jsut like any annuity. Therefore, for the same reason, I disagree with Ben's comment about returning the payin. Therefore, I agree with Linda. Just my opinion

SS payments and the COlAs that reciepents get are a major source of revenue that goes directly into the economy and have a mulitiplier effect in spurring economic activity much like unemployment payments. Those monies go directly back into the economy in the most efficient and direct manner because they are all spent virtually immediately by the recipients. They are one of the most powerful ways the government has to stimulate the economy and the economy is virtually tied to that fact. There is almost a direct one to one correspondence by chance or by relationship to the rate of inflation and the rate in the increase to the COLA. Funny how that works out.
Its much like all federal spending. There are consequences say if you cut the DoD budget not only to our military but have direct and powerful impacts to our economy and employment. SS, is one of the most powerful job creators in the economy. It certainly drives the economic and social behavior of what 65M Americans. They take those funds and spend them on food, transportation, medical care, clothing, hair cuts, pizza's, soap, dry cleaning, coffee...all those small local business's they use are enriched by that spending and they use that wealth to expand their business's and EMPLOY PEOPLE who spend the money they earn via expenditurs of SS payments.
Chain the CPI and you will chain the economy to enemic growth, a lower standard of living and stagnant employment growth. Its a vicious, unvirtuous cycle.But we are knee deep into and when you squeeze the ballon here it inflates somewhere else...cut the CPI and you are cutting ecomic growth and job creation...hey Mr. Speaker, I said, 'job creation!"
At present the CPI grossly understates real inflation just as Congress always intended when it amended the process of calculating the CPI by excluding food and energy the most costly components of living to seniors. Now they want to come back to SS and seniors and, punish and penalize users of the system again for all of Congress's past malifesance and criminal misconduct. Its always the poor and disadvantaged that get tapped for the bill. The weakest members of society, the oldest, the most vulnerable. And the rich, the rich just get richer. We are having a debate today to increase the rate of federal income tax on 2% of the wealthest Americans income after, thats after, the first $250K of income and they are screaming like pigs being gutted. Thats supposed to be a fair and balanced measure and then Congress will claim that by chaining the CPI its just a matter of sharing the pain to address the problems they created..created by starting two wars and not paying for them, created by tax breaks that werent paid for and extended every year without being paid for, stealing from the SS system by implimenting a tax holiday on FICA payments and extending those year after year without paying for them and on and on. And now they want to come back to seniors and say, its now time for you to feel some pain...pay your fair share. I say, I alreay gave at the office..go steal some money from somewhere else and just leave my COLA as meager as it is, ALONE!

I believe that the Speaker has offered the higher tax rates for those who have income exceeding $1 million dollars. I am not saying that should or should not be the correct figure, but it is a great starting point for the Democrats to work with. I also believe that the $250000 figure is much too low. That is not wealthy in New York and other places. I think that both parties should get an agreement on the tax increases aned spending cuts both in the military and civilian areas. Government workers have already sacrificed and will continue to sacrifice because of the 2 (to be 3) year pay freeze.

So the current way gives us to much money to cover the cost of living, Lets try a different formula that makes the COLA less. Why should the true cost of living and the amount we get for the COLA have anything to do with each other. Give me a break.